Mining: Pensions

Department for Energy and Climate Change written question – answered on 16th October 2015.

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Photo of Conor McGinn Conor McGinn Opposition Whip (Commons)

To ask the Secretary of State for Energy and Climate Change, what recent discussions her Department has had with the UK Miners Pension Scheme Association on the Miners Pension Scheme; and if she will review the provision that 50 per cent of any surplus made after 1994 will be paid to the Government.

Photo of Andrea Leadsom Andrea Leadsom The Minister of State, Department of Energy and Climate Change

Since the privatisation of the British Coal Corporation in 1994, the Government has provided a solvency guarantee to the Mineworkers’ Pension Scheme (MPS). That guarantee provides members with the reassurance that their basic pension entitlements will always rise in line with inflation and gives them the opportunity to share, with Government, in the benefits of any periodic surplus in the Scheme funds. In practice, this has meant that members enjoy bonus pensions worth almost 30% of their index-linked benefits. The guarantee further provides that the combination of these two pension elements will never fall in cash terms regardless of the performance of the funds.

The Government continues to believe that the equitable division of surpluses between the membership and Government represents fair and reasonable recompense for taxpayers’ past investment in the Schemes during the industry’s period of public ownership and for the risks they continue to bear through the Government guarantee which will continue till the closure of the scheme which Is not expected to be until the 2070s.

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